Exhibit 10.2


 


THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, OR TRANSFERRED EXCEPT
IN COMPLIANCE THEREWITH.


 


THIS
INSTRUMENT IS SUBJECT TO THE SUBORDINATION AGREEMENT DATED AS OF
OCTOBER 26, 1999 (AS AMENDED) BY AND AMONG ADVANCE AMERICA, CASH ADVANCE
CENTERS, INC. AND ITS SUBSIDIARIES AND AFFILIATES IDENTIFIED THEREIN, BANK OF
AMERICA, N.A., AND STEVE A. MCKENZIE, BRENDA B. MCKENZIE, NCAW, LLC, MCKENZIE
FAMILY PARTNERSHIP, L.P., MCKENZIE FAMILY PARTNERSHIP NO. 2, L.P., J. EDWARD
SCOGGINS, DARRYL M. WEAVER, DARRYL M. WEAVER IRREVOCABLE TRUST F/B/O CHILDREN
OF DARRYL M. WEAVER DATED JUNE 23, 1998, SHASTA MCKENZIE LILLARD FAMILY
TRUST DATED OCTOBER 30, 1997, ASHLEY ELIZABETH MCKENZIE FAMILY TRUST DATED
OCTOBER 30, 1997, STEVE A. MCKENZIE, JR. FAMILY TRUST DATED
OCTOBER 30, 1997, TRUST U/A STEVE A. MCKENZIE F/B/O SHASTA MCKENZIE
LILLARD DATED DECEMBER 23, 1993, TRUST U/A STEVE A. MCKENZIE F/B/O STEVE
A. MCKENZIE JR. DATED DECEMBER 23, 1993, AND TRUST U/A/ STEVE A. MCKENZIE
F/B/O ASHLEY ELIZABETH MCKENZIE DATED DECEMBER 23, 1993, THAT, AMONG OTHER
THINGS, CONTAINS PROVISIONS SUBORDINATING THE OBLIGATIONS OF ADVANCE AMERICA,
CASH ADVANCE CENTERS, INC. AND ITS SUBSIDIARIES AND AFFILIATES HEREUNDER
(INCLUDING, WITHOUT LIMITATION, THE OBLIGATIONS OF THE GUARANTORS) TO THE
OBLIGATIONS OF ADVANCE AMERICA, CASH ADVANCE CENTERS, INC. AND ITS SUBSIDIARIES
AND AFFILIATES TO THE SENIOR CREDITORS DEFINED IN SAID SUBORDINATION AGREEMENT AND
LIMITING THE RIGHTS OF THE HOLDER OF THIS INSTRUMENT TO RECEIVE PAYMENTS
HEREUNDER AND ACCELERATE THE MATURITY HEREOF, TO WHICH PROVISIONS SUCH HOLDER,
BY ACCEPTANCE HEREOF, AGREES.


 


	
  No. [      ]

  	
   

  	
  $[            ]

  
	
  Dated as of
  [             ]

  	
   

  	
   

  



 


ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.


 


13% Senior Subordinated Note Due 2007


 


ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.,
a Delaware corporation (together with its successors, transferees and assigns,
the “Issuer”), for value received,
hereby promises to pay, subject to Section 5 below, to the order of the
[              ]
(the “Holder”), the principal sum
of
[                  ]
($[                  ]),
by wire transfer of immediately available funds to the Holder’s account (the “Bank Account”) at a bank located in the
United States specified by the Seller Representative from time to time, on
October 15, 2007 (the “Maturity Date”),
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay, subject to Section 5 below, interest, in arrears, on the first day
of January, April, July and October (unless such day is not a
Business Day, in which event on the next succeeding Business Day) of each year
in which this Note remains outstanding and on the Maturity Date (each such
date, an “Interest Payment Date”),
commencing with
[                  ],
on the unpaid principal sum hereof


 

















 


outstanding in like coin or
currency, at the rates per annum set forth below, by wire transfer of
immediately available funds to the Bank Account, from the most recent Interest
Payment Date to which interest has been paid in full on this Note, or if no
interest has been paid on this Note, from [                  ],
until payment in full of the principal sum hereof has been made.


 


This Note shall bear interest, commencing [                  ],
at a rate per annum (the “Interest Rate”) equal
to 13%. Interest on this Note will be calculated on the basis of a 365 day year
for the actual number of days elapsed; provided that the Issuer shall pay
interest on overdue principal at a rate per annum equal to 18% (the “Overdue Rate”), and interest on overdue
installments of interest, to the extent lawful, at the Overdue Rate.


 


Upon the occurrence and continuation of a
Payment Default (as defined below) with respect to this Note, at the option and
upon demand of the Holder of this Note, the Issuer shall pay any overdue
interest on this Note through the issuance of additional Notes (the “Additional Securities”).  Such Additional Securities shall be issued
in an aggregate principal amount equal to the amount of overdue interest
payable with respect to this Note and such Additional Securities shall be
identical to this Note except that such Additional Notes shall bear interest at
the Overdue Rate and shall be payable on demand and shall contain such other
terms and conditions reasonably satisfactory to the Holder.


 


This Note is one of the duly authorized notes
of the Issuer referred to in Section 2.3.2.2 of the Contribution
Agreement.


 


Section 1.                                            Certain
Terms Defined.


 


(a)                                  The following terms
for all purposes of this Note shall have the respective meanings specified
below.


 


“Affiliate” means,
with respect to any specified Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such other
Person.  For the purposes of this
definition, the term “control”
(including with correlative meanings, the terms “controlling”, “controlled
by”, and “under common control with”),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.


 


“Business Day” means
any day except a Saturday, Sunday, or other day on which commercial banks in
the City of Chicago or the City of New York are authorized by law to close.


 


“Capital Lease Obligations”
means any amount payable with respect to any lease of any tangible or
intangible property (whether real, personal or mixed), however denoted, which
is required by GAAP to be reflected as a liability on the face of the balance
sheet of the lessee thereunder.


 


“Closing Date” shall
have the meaning given such term in the Contribution Agreement.


 


2

















 


“Common Stock”
means, with respect to the Issuer, any and all shares of common stock of the
Issuer.


 


“Contribution Agreement”
means the Contribution Agreement dated as of October 15, 1999, among the
Issuer and the Sellers, as amended.


 


“Indebtedness” means
for any Person without duplication: (a) all indebtedness, whether or not
represented by bonds, debentures, notes, securities, or other evidences of indebtedness,
for the repayment of money borrowed by such Person, (b) all indebtedness
representing deferred payment of the purchase price of property or assets,
except account payables or other obligations to trade creditors that have been
incurred in the ordinary course of business, (c) all Capital Lease Obligations
of such Person, (d) all indebtedness under guarantees, endorsements,
assumptions, or other contractual obligations of such Person, including any
letters of credit of such Person, or the obligations of such Person in respect
of, or to purchase or otherwise acquire, indebtedness of others, (e) all
indebtedness secured by a Lien existing on property owned by such Person,
whether or not the indebtedness secured thereby shall have been assumed by such
Person, (f) trade accounts payable more than one hundred twenty (120) days past
due, (g) all amendments, renewals, extensions, modifications, and refundings of
any indebtedness or obligations referred to in clauses (a), (b), (c), (d), (e),
or (f).


 


“Indemnification Obligations” means
any and all liabilities and obligations of the Holder to Issuer pursuant to
Section 11.1 of the Contribution Agreement that relates to the obligation
of the Holder to indemnify Issuer.


 


“Initial Shareholders” means
GDJ, Jr. Investments Limited Partnership, Stewart H. Johnson, Breeden
Investment Company, L.P., A. Foster Chapman, AAI/GDJ, III Trust dated 04/21/98,
AAI/SPJ Trust dated 04/21/98, Brannon Investments, L.P., S.P. Johnson
Irrevocable Trust Dtd. 12/13/94, Columbia Investments, L.L.C., Laurel
Investment Partners, L.L.C., and Beach Wheats Limited Partnership, or any of
their Affiliates.


 


“GAAP” means United
States generally accepted accounting principles as in effect from time to time.


 


“Lien” means any
lien, mortgage, security interest, tax lien, pledge, encumbrance, financing
statement, or conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of Indebtedness or any
other obligation, whether arising by agreement, operation of law, or otherwise.


 


“Other Acceleration Event”
means the acceleration of the principal amount of Indebtedness of the Issuer
(other than such Indebtedness in an aggregate principal amount not in excess of
$1,000,000) in advance of the stated maturity therefor, whether such
acceleration is voluntary, involuntary, by declaration, or otherwise or the
failure to pay such Indebtedness upon the stated maturity therefor.


 


“Payment Default”
means the failure to pay, when due (whether upon maturity, acceleration,
redemption, or otherwise), any principal of or interest on this Note and, other
than with respect to the payment of principal, such failure shall continue for
more than five (5) days.


 


3

















 


“Permitted Indebtedness”
shall mean any Indebtedness permitted to be contracted, created, incurred, or
assumed or permitted to exist pursuant to the provisions of Section 8.1 of
the Senior Loan Agreement.


 


“Permitted Liens”
shall have the meaning given such term in the Senior Loan Agreement.


 


“Person” means any
individual, sole proprietorship, corporation, business trust, unincorporated
organization, association, company, partnership, limited liability company,
joint venture, governmental authority (whether a national, federal, state,
county, municipality, or otherwise, and shall include without limitation any
instrumentality, division, agency, body, or department thereof), or other
entity.


 


“Public Offering”
means the underwritten sale to the general public after the date hereof of
Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended (other than a registration statement on Form
S-4, Form S-8 or any successor forms).


 


“Sellers” means
Steve A. McKenzie, Brenda B. McKenzie, NCAW, LLC, McKenzie Family Partnership,
L.P., McKenzie Family Partnership No. 2, L.P., J. Edward Scoggins, Darryl M.
Weaver, Darryl M. Weaver Irrevocable Trust f/b/o Children of Darryl M. Weaver
dated June 23, 1998, Shasta McKenzie Lillard Family Trust dated
October 30, 1997, Ashley Elizabeth McKenzie Family Trust dated
October 30, 1997, Steve A. McKenzie, Jr. Family Trust dated
October 30, 1997, Trust U/A Steve A. McKenzie f/b/o Shasta McKenzie
Lillard dated December 23, 1993, Trust U/A Steve A. McKenzie f/b/o Steve
A. McKenzie Jr. dated December 23, 1993, and Trust U/A Steve A. McKenzie
f/b/o Ashley Elizabeth McKenzie dated December 23, 1993, and their
respective transferees.


 


“Seller Notes”
means, collectively, the promissory notes of the Issuer, each initially dated
as of October 15, 1999, and each issued to a Seller, as more fully
described in Section 2.3.2.2 of the Contribution Agreement, including any
transfers or replacements thereof (including this Note).


 


“Seller Representative”
means Steve A. McKenzie and each of his successors and assigns.


 


“Senior Acceleration Event”
means (i) the acceleration of at least $1,000,000 of principal amount of Senior
Indebtedness in advance of the stated maturity therefor, whether such
acceleration is involuntary, by declaration or otherwise or the failure to pay
such Indebtedness upon the stated maturity therefor or (ii) a material breach
by the Issuer of any of its obligations to the Holder under the Subordination
Agreement.


 


“Senior Indebtedness” means
all Indebtedness (whether now outstanding or hereafter incurred) of the Issuer
in respect of the Senior Loan Agreement, including, without limitation, all
principal, interest, fees, expenses, indemnities, and all other amounts payable
under the Senior Loan Agreement and any notes, security documents, guarantees,
or other loan documents referred to therein, and any amendments, modifications
or supplements to, or any renewals, extensions, deferrals, refinancings and
refundings of, any of the foregoing.


 


4

















 


“Senior Lender”
means, collectively, Bank of America, N.A. and the other lenders from time to
time under the Senior Loan Agreement, and each of their respective successors
and assigns, and any Person who replaces or refinances the Indebtedness of the
Issuer incurred under the Senior Loan Agreement.


 


“Senior Loan Agreement”
means the Amended and Restated Credit Agreement dated as of September 30,
2002 by and among Issuer (as borrower), the Subsidiaries and affiliates of the
Issuer identified therein (as guarantors), the lenders identified therein and
Bank of America, N.A. (as Administrative Agent) and all agreements, documents
and instruments delivered pursuant thereto in connection with the loans and
advances made thereunder, as such agreements and documents may be amended,
amended and restated, supplemented, consolidated or otherwise modified from
time to time in accordance with the terms and provisions of the Subordination
Agreement.


 


“Subordination Agreement”
means the Subordination Agreement dated as of October 26, 1999 among the
Issuer, the Senior Lender, the Holder, and the other Sellers, as such
subordination agreement may be amended, amended and restated, supplemented,
consolidated, or otherwise modified from time to time.


 


“Subordinated Debt” means,
collectively, the 13% Junior Unsecured Subordinated Notes Due 2007 of the
Issuer, as amended, each dated as of or after May 22, 2001, in the
aggregate principal amount of $11,557,890.42, including any transfers or replacements
thereof.


 


“Subordinated Debt Subordination Agreement” means
the Subordination Agreement dated as of October 15, 1999 among the Issuer,
the Senior Lender, the Holder, the other Sellers, and the Initial Shareholders,
as such subordination agreement may be amended, amended and restated,
supplemented, consolidated, or otherwise modified from time to time.


 


(b)                                 Each of the following
terms is defined in the Section set forth opposite such term:


 


	
  Term

  	
   

  	
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Change of Control

  	
   

  	
  4.2

  	
   

  
	
  Event of Default

  	
   

  	
  2.1

  	
   

  
	
  Prepayment Notice

  	
   

  	
  4.2

  	
   

  



 


Section 2.                                            Events
of Default and Remedies.


 


Section 2.1.                                   Event
of Default Defined: Acceleration of Maturity: Waiver of Default.  In case one or more of the following events
(“Events of Default”) (whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:


 


(a)                                  a Payment Default;


 


5

















 


(b)                                 a breach by the Issuer
of any covenant contained in Section 3 hereof or the occurrence of an
Event of Default by Issuer under the Subordinated Debt Subordination Agreement;


 


(c)                                  a Senior Acceleration
Event or an Other Acceleration Event;


 


(d)                                 the Issuer shall
permit or suffer to exist the entry of a decree or order for relief, entered by
a court of competent jurisdiction, in respect of the Issuer in an involuntary
case under any applicable bankruptcy, insolvency, or other similar law relating
to or affecting creditors’ rights generally now or hereafter in effect, or
appointing a receiver, liquidator, custodian, trustee, sequestrator (or similar
official) of the Issuer or for any substantial part of the property of the
Issuer or ordering the winding up or liquidation of the affairs of the Issuer
or any such case or proceeding shall have been commenced against the Issuer
seeking such a decree or order that remains unstayed and in effect or has not
been dismissed for a period of 90 days; or


 


(e)                                  the Issuer shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law relating to or affecting creditors’ rights generally now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of the property of
the Issuer or the Issuer shall make any general assignment for the benefit of
creditors;


 


then, and in each and every such case, other
than an Event of Default described in clauses (a), (b), and (c) above, the
aggregate outstanding principal amount of this Note, together with any accrued
or unpaid interest thereon, shall become and be immediately due and payable
without any declaration, presentment, demand, protest, notice of default,
notice of acceleration or other act on the part of the Holder, all of which are
hereby expressly waived.  Subject to
Section 5 hereof, upon the occurrence of an Event of Default described in
clauses (a), (b), or (c), the Holder of this Note may (in addition to any other
right, power, or remedy permitted to the Holder by law) declare the entire
aggregate outstanding principal amount of this Note due and payable and the
same, together with any accrued and unpaid interest thereon, shall thereupon
become forthwith due and payable, without any presentment, demand, protest,
notice of default, notice of acceleration, or other notices of any kind, all of
which are hereby expressly waived.


 


Section 2.2.                                   Powers
and Remedies Cumulative; Delay or Omission Not Waiver of Default.  No right or remedy herein conferred upon or
reserved to the Holder is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.


 


No delay or omission of the Holder to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and every power and remedy given by this Note or by law may be
exercised from time to time, and as often as shall be deemed expedient, by the
Holder.


 


6

















 


Any term or provision of this Note (including
this Section 2.2) to the contrary notwithstanding, the Holder shall have
no right (directly or indirectly) to exercise, nor shall any Holder in fact
exercise (directly or indirectly), any rights or remedies against the Issuer,
any of its subsidiaries or any of their respective assets in respect of any
breach hereunder or otherwise, nor shall the Holder commence (directly or
indirectly) any litigation, action or other proceeding against any of the
foregoing in respect of any breach hereunder or otherwise, unless (but only
unless) an Event of Default has occurred and is continuing, and, in such event,
the exercise of any such right or remedy shall be subject to Section 5
hereof.


 


Section 2.3.                                   Waiver
of Past Defaults.  The Holder may
waive any past Event of Default hereunder and its consequences.  In the case of any such waiver, the Issuer
and the Holder shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereon.


 


Upon any such waiver, such Event of Default
shall cease to exist and be deemed to have been cured and not to have occurred,
and any Event of Default arising therefrom shall be deemed to have been cured,
and not to have occurred for every purpose of this Note; but no such waiver
shall extend to any subsequent or other Event of Default or impair any right
consequent thereon.


 


Section 3.                                            Covenants.  (a) The Issuer shall not grant, create,
incur, assume, or permit to exist any Liens with respect to any of its property
and assets, whether now owned or hereinafter acquired, except for Permitted
Liens.


 


(b)                                 The Issuer shall not
contract, create, incur, assume, or permit to exist any Indebtedness, except
for Permitted Indebtedness.


 


(c)                                  The Issuer shall not
make any payment of principal of any of the Subordinated Debt if such payment
is not permitted by the terms of the Subordinated Debt Subordination Agreement.


 


Section 4.                                            Redemption
and Prepayment.


 


Section 4.1.                                   Optional
Redemption.


 


(a)                                  So long as no default
exists or would occur under or in respect of any Senior Indebtedness, the
Issuer at its option may at any time redeem all, or from time to time any part
of, the principal amount of this Note, without penalty or premium, at a price
equal to 100% of the principal amount of this Note so redeemed, together with
accrued and unpaid interest on such principal through the date of redemption,
by giving at least five (5) days notice of such redemption to the Seller
Representative, specifying the date of redemption, the Seller Notes or portions
thereof to be redeemed, the place to surrender such Seller Notes, and the
redemption price.


 


(b)                                 In the event the
Issuer shall redeem this Note or any portion hereof, the Holder hereby agrees
to surrender this Note for payment of the redemption price at the times and at
the place and in the manner instructed by Issuer.  Upon payment of the redemption price of the portion of this Note
called for redemption, interest on the principal amount of this Note so called


 


7

















 


for redemption shall cease to
accrue (regardless of the failure, if any, of the Holder to surrender this Note
for payment as described above), and all rights of the Holder thereof (except
the right to receive from the Issuer the redemption price) shall cease. Upon
surrender in accordance with said instructions of the Issuer to the Holder of
this Note (properly endorsed or assigned for transfer, if the Board of
Directors of the Issuer shall so require), this Note (or portion hereof) shall
be redeemed by the Issuer at the aforesaid redemption price.  In case this Note is redeemed in part, a new
Note, in substantially the same form and incorporating substantially the same
terms as this Note, shall be issued to the Holder representing the unredeemed portion
of this Note without cost to the Holder hereof.


 


Section 4.2.                                   Prepayment
upon Change of Control and Public Offering.


 


(a)                                  If there shall occur
a Change in Control (as defined below) or a Public Offering, the Holder shall
have the right, at such Holder’s option, to require the Issuer to prepay, and
upon the exercise of such right the Issuer shall prepay:  (i) in the case of a Change of Control,
the aggregate principal amount of this Note outstanding as of the date of
prepayment, together with accrued and unpaid interest through the date of
prepayment, or (ii) in the case of a Public Offering, an amount equal to
the lesser of (A)  the aggregate principal amount of this Note
outstanding, plus all accrued and unpaid interest thereon to the date of
prepayment or (B) the product of 50% of the net proceeds to the Issuer
from a Public Offering multiplied by a fraction, the numerator of which is the
aggregate outstanding principal amount of this Note, together with accrued but
unpaid interest, and the denominator of which is the aggregate outstanding
principal amount of the Seller Notes, together with all accrued but unpaid
interest thereon.  All prepayments made
pursuant to this Section 4.2(a) shall be applied first to all accrued and
unpaid interest and second to outstanding principal.  For purposes of this Section 4.2, “Change of Control” means the sale, transfer, or other
disposition by the Initial Shareholders, in a single transaction or a series of
transactions, of more than 25% of the Common Stock that is issued and
outstanding to another Person or Persons.


 


(b)                                 On or before the tenth
day after the occurrence of a Change of Control or a Public Offering, the
Issuer shall send the Seller Representative a notice (a “Prepayment Notice”) advising the Seller
Representative of the rights of the Holder hereunder and specifying the date,
not less than 20 nor more than 60 days after the date such notice is delivered
to the Seller Representative, on which the Issuer proposes to prepay this Note
(or portion hereof) if the Holder requests prepayment pursuant to
Section 4.2(b); provided that no failure of the Issuer to give such
notice shall limit the rights of the Holder hereunder.  If the Holder wishes to exercise its rights
hereunder it shall cause the Seller Representative to deliver to the Issuer, on
or before the fifteenth day after receipt by the Seller Representative of the
Prepayment Notice, written notice (which shall be irrevocable) of such Holder’s
exercise of such right, which notice shall set forth the name of the Holder and
the aggregate principal amount of this Note held by such Holder as to which an
election to exercise its rights hereunder is being made.


 


(c)                                  From and after the
prepayment date set forth in the Prepayment Notice (unless an Event of Default
shall be made by the Issuer in providing money for the prepayment of this Note
or portion hereof), interest on the principal amount this Note to be prepaid,
if the Holder elected to have this Note (or portion hereof) prepaid as set
forth in the foregoing paragraph (b), shall cease to accrue, and all rights of
the Holder thereof (except the right to receive from the Issuer


 


8

















 


such prepayment) shall
cease.  Upon surrender in accordance
with said notice of the certificate for this Note so required to be prepaid
(properly endorsed or assigned for transfer, if the Board of Directors of the
Issuer shall so require and the Prepayment Notice shall so state), this Note
(or portion hereof) shall be prepaid by the Issuer in the amount required by
Section 4.2(a).  In case this Note
is prepaid in part, a new Note, in substantially the same form and
incorporating substantially the same terms as this Note, shall be issued to the
Holder representing the unpaid portion of this Note without cost to the Holder
thereof.


 


Section 5.                                            Subordination.  The Issuer covenants and agrees and the
Holder, by its acceptance hereof likewise covenants and agrees, in each case
notwithstanding any other provisions of this Note or any other agreement,
document or instrument (it being the express agreement of such Holder that the
provisions of this Section 5 and thereby the provisions of the
Subordination Agreement shall govern in the event of any conflicting terms or
provisions herein or otherwise), that this Note shall be issued subject to the
provisions of the Subordination Agreement; and the Person holding this Note,
whether upon original issue or upon transfer, assignment, or exchange thereof
accepts and agrees that the payment of the principal of, interest on or any
other amounts or obligations (monetary or otherwise) on, under or in respect of
this Note by or on behalf of the Issuer shall, to the extent and in the manner
set forth in the Subordination Agreement, be subordinated and junior in right
of payment, to the prior payment in full in cash of all Senior Indebtedness.


 


Section 6.                                            Miscellaneous.


 


Section 6.1.                                   Modification
of Notes.  This Note may be modified
with the written consent of the Issuer and the Holder.  The Holder may waive compliance by the
Issuer of any provision of this Note.


 


Section 6.2.                                   Set-Off.  Notwithstanding anything contained herein to
the contrary, if any Indemnification Obligations are due and owing by the
Holder (or any prior holder of a note representing some or all of the principal
amount hereof) to Issuer, at the sole discretion of the Issuer, and in
accordance with the terms of the Contribution Agreement, the Issuer may set off
and apply all or any portion of such Indemnification Obligations to the
Indebtedness due and owing, or that will become due and owing, to the Holder
under this Note (including to the same extent that the Issuer would have been
able to set off such Indemnification Obligations against such prior holder(s))
in the order in which such payments are to be made in accordance with the terms
of this Note.  The Issuer shall notify
the Seller Representative in writing of the amounts, if any, it has elected to
offset pursuant to this Section 6.2 on or prior to the time
payments to be offset hereunder would otherwise be required to be made.


 


Section 6.3.                                   Miscellaneous.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of South Carolina
applicable to contracts made and to be performed therein and without regard to
such State’s conflict of law provisions; the rights and remedies of the parties
hereunder shall be determined in accordance with the laws of South
Carolina.  The Issuer and the Holder
acknowledge that the provisions of this Section 6.3 are just, fair and
reasonable to the parties and the parties’ respective agents, employees, and
representatives.  The Issuer and the
Holder further acknowledge that such provisions represent terms that have been
bargained for in the course of the parties’ discussions and negotiations


 


9

















 


leading to the agreement, and
that the bargaining power of the Issuer and the Holder is approximately equal
in the matters set forth in this agreement. 
The Issuer hereby waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance,
performance, and enforcement of this Note, except as specifically provided
herein, and consents to extensions of the time of payment, or forbearance or
other indulgence without notice. The Holder by acceptance of this Note agrees
to be bound by the provisions of this Note and the Subordination
Agreement.  The Section headings
herein are for convenience only and shall not affect the construction hereof.


 


Section 6.4.                                   Transfer.  This Note is registered on the books of the
Issuer and is transferable only upon the prior written consent of Issuer (which
consent may not be unreasonably withheld) and only by surrender thereof at the
principal office of the Issuer duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered Holder of this Note or
its attorney duly authorized in writing. 
Any such transferee shall be deemed a Holder hereunder.


 


Section 6.5.                                   Seller
Representative.  The Holder hereby
consents and approves to the appointment of Steve A. McKenzie as initial Seller
Representative and hereby agrees that the Seller Representative may act, and
receive notices, on behalf of the Holder as specified and provided in this Note.  If Steve A. McKenzie or his duly approved
successors or assigns cease for any reason to act in the capacity of Seller
Representative and no Person is approved by the Issuer and a majority of the
holders of the aggregate outstanding principal amount of the Seller Notes as a
successor or assign thereof, all references to Seller Representative contained
in this Note shall be deemed to mean the Holder of this Note.


 


[Signature Page Follows]


 


10

















 


IN WITNESS WHEREOF, the Issuer
has caused this instrument to be duly executed as of this
[        ] day of
[                  ],
[          ].


 


 


	
   

  	
  ADVANCE
  AMERICA, CASH

  ADVANCE CENTERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  John T.
  Egeland, President